ROOF Blog

Google is in talks with British estate agents to launch an online property portal, which experts say could pose a serious threat to existing property websites and local newspapers.

The US internet search company launched a property portal in Australia last August through which estate agents list properties for free, showing both pictures taken from its Street View service and details on a map.

Estate agents and property websites expect Google to launch a similar portal in the UK in early 2010, attracting substantial advertising revenue.

Ed Mead at Douglas & Gordon’s, the estate agency, said it had spoken to Google about the plans:

‘It looks very simple. If it stays free, then Google has a massive winner on its hands as it will get the backing from estate agents currently paying for rival sites.’

A member of the Bank of England’s interest rate setting committee has called for the introduction of a tax on housing that would act as an ‘automatic stabiliser’ to help avoid real estate bubbles like the one that helped to cause the financial crisis.

Adam Posen, an American academic and external member of the Monetary Policy Committee, countered suggestions that central banks should have been quicker to raise rates in the run up to the crisis, arguing that tighter monetary policy would have had little effect in halting bubbles.

Citing the greater damage caused by housing slumps than by collapses in prices of other assets such as equities or commercial property following booms, Mr Posen proposed that new tools need to be created in order to target the residential real estate market in particular.

The Conservative Party would scrap home information packs (HIPs) ‘in a matter of weeks’ after coming to power, the Shadow Housing Minister Grant Shapps said yesterday.

The pledge follows claims by estate agents that the packs are impeding a housing market recovery, as potential sellers regard the typical cost of between £300 and £400 as another disincentive at a time when homeowners are already reluctant to move.

One of the reasons that property prices have risen since April is that the amount of stock on the market is low. Mr Shapps said: ‘House prices are rising because supply is restricted. HIPs have not helped.

‘The main priority is to scrap them. They are easy to suspend and there are emergency powers we can use to do so. This can happen very quickly. HIPs will be gone in a matter of weeks.’

Banks were today accused of profiteering from homeowners during the recession, as it emerged that the average interest charged on variable-rate mortgages is 4.2 per cent higher than the Bank of England’s base rate.

The average Standard Variable Rate mortgage now charges interest rates of 4.7 per cent, down only one per cent over the past year – when the base rate fell by 2.5 per cent. Vera Cottrell from consumer watchdog Which? said the variable rate market was ‘raising serious concerns’.

She said: ‘Lenders are getting away with charging very high mortgage rates right now, many have an incredibly high margin between base rate and the interest being charged. That’s offering consumers a poor deal.’

The Government’s stamp-duty holiday on properties sold for less than £175,000 has not helped nearly as many homeowners as first predicted.

Figures obtained by property website zoopla.co.uk show that in the first 12 months of the holiday until 1 September, buyers saved just £173m compared with the £600m predicted by the Government.

A combination of factors lies behind the disparity. First-time buyers – the most likely to benefit from the holiday – have found it hard to get mortgages due to tight lending criteria. Transaction levels have also been lower than normal across the whole market with a shortage of properties to buy.

The housing market rebound showed no sign of slowing in October, according to the latest figures, with prices rising by 1.2 per cent.

Halifax said that the increase was the fourth consecutive rise by its measure.

House prices are now 7.1 per cent higher than they were six months ago and 2.9 per cent higher than in December last year, the lender said.

Prices in the three months to October were 2.9 per cent, or £4,667 higher than in the previous three months.

Halifax said that there were early signs that more people were beginning to put their homes on the market as conditions improved; a trend that economists have said could lead to a relapse in recent price rises.

Howard Archer, chief economist at Global Insight, said: ‘Personally, I’m sceptical that house prices can go on rising for much longer. That’s not to say that they will fall off a cliff – I just don’t think the economy is strong enough to sustain these increases.

‘A relapse in house prices will be even more likely if the recent firming trend leads to more properties coming on to the market, thereby moving the supply-demand balance away from vendors towards buyers.’

The unexpected ‘mini-boom’ in house prices continued in September, according to the latest official figures, but analysts say that a slowdown in the pace of the recent rebound has begun.

Figures from the Land Registry showed a rise of 0.9 per cent in prices last month, taking the price of the average house in England and Wales to £158,377 and bringing the annual decline to 5.6 per cent.

However, estate agents have said that transaction levels remain low and have sunk further in the first few weeks of October as homebuyers and sellers begin to hunker down in the run-up to Christmas.

Rightmove reported that the number of new listings had fallen to 94,629 in October from 105,924 in September, and the Royal Institution of Chartered Surveyors reported slight softening in demand last month.

The average asking price for homes in England and Wales has recorded unusually strong growth in the past month, according to the property website Rightmove. The increase of 2.8 per cent in the four weeks to 10 October over the previous four-week period is one of the sharpest four-weekly rises Rightmove has ever recorded. It is the seventh time the website has recorded positive growth since February, compared with only two declines. The average asking price, at £230,184 is now 0.2 per cent higher than a year ago, when UK and global financial markets seized up. The largest increases are in London, where increased interest from buyers drove asking prices up by 6.5 per cent over the previous four weeks, says Rightmove.

The price of homes in the UK rose by 1.9 per cent in January, bringing to an end an 11-month period of house falls. However, the latest house price index from the Halifax saw a fall of 16.8 per cent over the year since January 2008. Chief economist at the bank said there are some ‘very early signs that market activity may be stabilising, albeit at quite a low level’.

Housing minister Margaret Beckett said yesterday that the lifting of restrictions on councils to borrow private sector money would help fund social housing programmes. She is believed to have asked the Treasury to let councils have more financial freedom, allowing them to borrow freely on the open market. She added that some restrictions were already being lifted with town halls being able to bid, like housing associations, for social housing grants.